Sharing Isn't Caring

October 6, 2010

Late last month, Washington, D.C., launched its Capital Bikeshare ("CaBi") program to much acclaim from the usual suspects -- New Urbanists and bicycle imperialists. Contemporary bike-sharing programs involve the placement of controlled bicycle racks around a city so that residents, tourists and commuters can rent bikes for a fixed period of time and then return them to other racks around the city. All for a nominal, generally subsidized fee, says Marc Scribner, assistant editor and policy analyst with the Competitive Enterprise Institute.

Scribner is not thrilled with bike-sharing for three main reasons.

First, every one of these systems operates at a loss.

For example, Paris' oft-laudedVélib program experienced a stock loss rate of nearly 80 percent after launch.

That is to say, of the initial 20,600 bikes -- with an average cost of $3,500 per bike when initial investment andmaintenanceare included -- 16,000 were either stolen or damaged beyond repair.

Another example is Montreal's BIXI program, which is currently more than $30 million in debt.

Second, proponents claim externalities from increased bike-share use -- less congestion, less pollution -- provide benefits not shown by simple fiscal accounting. This appears at first glance to be a valid point. However, when looking at experiences with similar programs in other cities, the positive externalities argument falls flat. Researchers at McGill University released a study with the following key findings: